February 22nd, 2010
08:02 AM ET
4 years ago

Obama wants government power to block excessive health insurance rate hikes

President Obama wants the government to have the power to block excessive health insurance rate increases.
President Obama wants the government to have the power to block excessive health insurance rate increases.




Washington (CNN) – The Obama administration will propose legislation that would allow the government to block excessive rate increases by health insurance companies, a senior administration official told CNN Sunday.

The official could not speak on the record because the White House has not yet formally announced the proposal.

Word of the administration plan comes as the White House was to unveil President Barack Obama's latest health insurance reform proposal at 10 a.m. ET Monday.

The House and Senate have passed their own versions of health care reform. The new Obama plan is expected to attempt to smooth the differences.

The proposal seeks to put "American families and small business owners in control of their own health care," the official said. It stems from discussions that have taken place with the House and the Senate, the official said.

Obama will propose changes that include eliminating the so-called "Nebraska deal," a provision worked in by Sen. Ben Nelson, a Nebraska Democrat, that exempts that state from paying increased Medicaid expenses, the official said.

The president also plans to include a series of measures proposed by Republicans to eliminate waste, fraud and abuse; and the introduction of a new provision to prevent arbitrary insurance rate hikes like a recent 39 percent increase in California.

A televised bipartisan discussion on health care reform is scheduled to take place on Thursday. Obama believes the discussion "will be the most productive if Democrats come to the table with a consolidated proposal" - what the president is releasing Monday, the official said.

Obama "hopes the Republicans will follow suit and come with their own unified proposal," the official said. "He'll be open to Republican ideas, and he hopes they'll be open to ours."

The legislation on insurance rates "would grant the federal health and human services secretary new authority to review, and to block, premium increases by private insurers, potentially superseding state insurance regulators," the New York Times reported Sunday night, citing administration officials.

"The bill would create a new Health Insurance Rate Authority, made up of health industry experts that would issue an annual report setting the parameters for reasonable rate increases based on conditions in the market."

The officials said they believe such legislation would take effect immediately after a health care reform bill is signed into law.

– CNN's Ed Henry contributed to this report


Filed under: Health care • President Obama
soundoff (61 Responses)
  1. jp,michigan

    The arrogance of this President and his counter part on the Hill , to present his health-care reform plan, before holding the conference on Thursday with the Republicans. It shows he has no intention of using any other ideas except his, or the democrats on health care reform. He will push his agenda against the will of the people. If this is not socialism than what would you call it? The government doesn't always no best and Obama, if he follows through with this plan of reconciliation, will definitely be a one term president.

    February 22, 2010 09:23 am at 9:23 am |
  2. Debby

    Why is Obama so insistant on this so called affordable healthcare plan when people are scrambling to get jobs and trying to keep the ones they have. You can't buy into anything if your unemployed Barry even your Obamacare. Lets get the economy growing again and then have a healthcare plan. People have cut down seeing their doc's. for routine physicals because they are afraid something will be wrong and they can't afford to lose their job. They are telling their Doctors I rather drop dead and leave my family something then not be employed and them have nothing.

    February 22, 2010 09:25 am at 9:25 am |
  3. Caesar the Great

    Yeah this will almost work, NOT!!! You cant regulate the most regulated industry to guarantee they lose money. This administration has no clue how insurance works. Rates go up because the number of healthy individuals continues to go down. In order to cover costs of the now mostly sick people covered rates must go up. If you put a cap on rates the insurance industry has two options, make the types of plans offered unacceptible to the people purchasing them, or drop the sickest people. Plus the government needs to realize that the more people that are employed means that more people will be covered, which in turn lowers rates. The government thinks they understand everything, but it is becoming more and more clear that they have no clue how insurance works. And these are the people you want running a national plan???

    February 22, 2010 09:28 am at 9:28 am |
  4. Caesar the Great

    And while you are at it, jack up taxes on the lifestyle choices that have led to this situation. Tax tobacco, alcohol and heaven forbid fast foods!!!

    February 22, 2010 09:29 am at 9:29 am |
  5. Rick McDaniel

    As long as you have profit-center health insurance, you will have health insurance abuse.

    You had the chance to do what was needed, by creating National Health Care for all......but the congress won't have it, because that eliminates the huge profits for many of those who finance their campaigns, and keep them rolling in the dough.

    Congress has sold out to special interests, pure and simple. Obama has too, as he has so often demonstrated.

    February 22, 2010 09:29 am at 9:29 am |
  6. Enough is Enough

    Hay Obozo how about putting caps on excessive fees charged by trial lawyers.

    February 22, 2010 09:35 am at 9:35 am |
  7. Paul C.

    It will be interesting to see if the Republicans block this proposal.
    My money says they will not back or vote for it. It must be socialism.

    February 22, 2010 09:35 am at 9:35 am |
  8. Nevada dude

    Amen. I would not lose one minute of sleep if they regulated the insurance industry. We cant be having crazy rises in premiums just because companies want to earn huge bonuses. The Public Health and the Private Insurance companies' bottom line are diametrically opposed interests. Its time we fixed this and regulated the insurance industry!!

    February 22, 2010 09:43 am at 9:43 am |
  9. Susan in NC

    Sounds like a GREAT idea to me!

    February 22, 2010 09:44 am at 9:44 am |
  10. Squigman

    Why not? The republicans want the banks and wall street to have free reign over the populace. Free to cheat, swindle, and allow bloated bonuses to be paid to the people at the top. Why shouldn't the people at the common citizen level get a break once in a while?

    February 22, 2010 09:48 am at 9:48 am |
  11. Phuq Ewe Tu

    It is time for the REVOLUTION! Let health care pass in spite of Republicans who sell their souls to block it.. Crush the GOP and may thry rot in hell withouth health care forever! Viva la Revolucion! Go OBAMA-BIDEN in 2012!

    February 22, 2010 09:54 am at 9:54 am |
  12. Brendan H., San Antonio, TX

    And you can bet, in a bipartisan show of unity, the GOP will get on board with this and separate from the medical industry whom they protect, right?

    If ever Obama had a chance to expose the GOP for being anything but the party for the poeple, this is it!

    February 22, 2010 09:56 am at 9:56 am |
  13. It has begun-

    This POTUS is an elitists moron!!!
    If u r for this ask yourself these questions:
    -If healthcare is so dire and people are suffering because of the lack of free, why does it go into effect 3-4 yrs fr now but we have to pay for it NOW!? Is it ok that u who r suffering/dying b/c of no HC, suffer/die waiting another 3-4yrs?
    -If coverage will be extended to 30 million uninsured, how come in 10yrs over 30 million will still be uninsured? Yet the deficit woudl explode to over $13Trillion(See CBO report).
    -why do u want your children, grand children, to pay for your HC?

    Yes Mr. President! U know what is best for the rest of us even when we don't want it!! Keep ramming legislations down our throats inspite of our objections. While u are at it, help pack the bags of you caucus because they will be gone after November and u will be next 2012!

    February 22, 2010 10:02 am at 10:02 am |
  14. Elle in WA

    Awesome. Very happy to hear this and I hope something can be pulled together from both sides.

    February 22, 2010 10:03 am at 10:03 am |
  15. Sam Sixpack

    What liars. They can't wait to get their hands on the money so they can skim.

    All it will take for an insurance company to raise your rates is for the company to "spread the wealth around" – to Obama and friends.

    They just can't wait to get their sticky hands on all that money.

    February 22, 2010 10:08 am at 10:08 am |
  16. mjm

    "The Obama administration will propose legislation that would allow the government to block excessive rate increases by health insurance companies.."

    Will Obama put a cap on the cost of doing business as well? How about auto insurance? Those rates go up from time to time. Is he going to cap that? How about the cost of cable? Comcast needs to be capped as well as Direct TV. Cell phone companies seem to have excessive rate increases....let's get them too.

    The only thing Obama should be blocking is excessive government spending and tax.

    February 22, 2010 10:15 am at 10:15 am |
  17. Yas

    Whatever it takes to get premiums down. My husband & I are retired and are currently paying $689.00 (almost $1400.00 combined) each per month for Health Insurance.

    The premium have gone up every year since retirement....If something is not done we, like so many others between the ages of 55 to 65 will have to try and get a job just to pay for our health insurance.

    I can't tell you how many people in our age group who are working (taking jobs that could go to younger generation) just because of health insurance cost.

    Someone needs to take a poll and see just how many jobs would be created if health insurance reform was passed.

    February 22, 2010 10:15 am at 10:15 am |
  18. Danny

    There's some "socialism" that everyone except insurance company executives has got to love!

    February 22, 2010 10:15 am at 10:15 am |
  19. bmw

    Anytime the American people are a "captive audience" for Big Business – whether it's utility rates, insurance profits, or gasoline prices – the federal government is needed to "level the playing field". Let the Republicans scream socialism all they want; they think their job is to ensure corporate profits. I want government to protect Americans from exploitation by the rich and powerful.

    February 22, 2010 10:18 am at 10:18 am |
  20. Sam Sixpack

    If he was sincere, he would be trying to block price-gouging by pharmaceutical companies. What a liar.

    This guy thinks you are so stupid as to believe that drug prices can go up and up and up and insurance companies will just magically pay for it. What a liar.

    He wants a mechanism by which cronies can skim off a portion of any profits insurance companies might make. What a liar.

    He wants to skim 1/2 trillion off of Medicare, make a pretty speech and pull the plug on your grandmother.

    February 22, 2010 10:19 am at 10:19 am |
  21. Cynthia

    I'm glad the President is removing that deal that was given to that traitor bill nelson of nebraska. that loser has been part of the problem and not helping his party secure a health care bill he shouldn't get any perks. I cannot wait to hear about this bill today, I hope the President don't let the repubicians change his plans on passing this.

    February 22, 2010 10:23 am at 10:23 am |
  22. Angus McDugan

    There he is with that finger pointing again.

    How about not taking over the health care industry and reforming how we handle lawsuits? Looser pays would fix this. But we know this won't happen with Obama who protects ambulance chasers everywhere.

    RIGHT??????

    February 22, 2010 10:27 am at 10:27 am |
  23. The lonely Libertarian of Liverpool NY

    Price caps again? Sure lets keep doing the same things over and over expecting different results, never worked before so why not try it again? Knowing this will lead to less health care in the long run.

    February 22, 2010 10:27 am at 10:27 am |
  24. Fred

    @ least Bush enacted a perscription drug plan and Obama has done nothing but repackage a failure bill.Start over from the ground up and listen to the polls instead of pushing YOUR OWN AGENDA.

    February 22, 2010 10:28 am at 10:28 am |
  25. Brian

    They just need to quit screwing around and get a bill passed. My wife is a 26-year-old healthy nonsmoker who hasn't even had a kid yet and her insurance went up by more than 50 percent after her first year with the plan. Totally ridiculous and unacceptable. We need more healthy people, who often choose to not purchase insurance, to be forced into the pool so it isn't just the healthy and responsible individuals like my wife and I trying to pay enough to offset the exorbitant expenditures coming from the obese and unhealthy population.

    February 22, 2010 10:28 am at 10:28 am |
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